The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) deleteD addition to trading turnover, of the value of goods deemed to be supplied in the execution of works contract as it was erroneous.
The appellant, M/s.Deify Infrastructures Limited are service providers of works contract service and Business Auxiliary Service. They also undertake trading of various items such as coal, iron ore, iron ore fines, pellets, etc. apart from supply of fabrication and construction material and engineering equipment, under proper sales invoices. The appellant also avails cenvat credit of service tax paid on input services including common input services such as practicing CA services, Credit rating agency services, GTA services, Manpower Supply Services, Banking Services, insurance services. They are discharging their service tax liability under reverse charge mechanism in respect of GTA Service, Manpower Supply Agency Service, and Security Service.
A show-cause notice was issued to the appellant, demanding an amount of Rs.20,40,012/- in terms of provision of Rule 14 of Cenvat Credit Rules, 2004 read with Section 73 of the Finance Act, 1994, along with interest read with Section 75 and penalty under Rule 15(3) of the Cenvat Credit Rules, 2004 read with Section 78 of the Finance Act, 1994.
The Coram of Judicial Member, Anil Choudhary held that that the addition to the trading turnover, of the value of the goods deemed to be supplied in the execution of the works contract, is erroneous and wrong. Accordingly, show cause notice was misconceived.
“I further take notice that in the earlier period, identical show cause notice dated 2.9.2016 was issued to the appellant for denying cenvat credit to the extent of Rs.1,37,01,095/- . On similar grounds, the said show cause notice was adjudicated by the Addl. Commissioner vide order-in-original dated 26.03.2018, wherein similar demand with respect to the goods deemed to be supplied in the course of works contract service, was dropped. The said order has been accepted by the Department, as no further appeal has been filed,” the tribunal said.
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